FTC flags up flaws in mobile payment security

The mobile payments industry is not doing enough to protect consumers from identity theft and billing scams, according to a new a report from the Federal Trade Commission (FTC) (reports StrategyEye). The FTC suggests that consumers are unwilling to adopt mobile payments, because they do not trust the technology is advising companies to do more to protect and inform their users within the mobile payment space if they want to see widespread uptake.

The FTC claims one of the main dangers surounding mobile payments concerns billing scams such as ‘cramming’ where third parties add payments to users’ mobile bills without their consent. The FTC notes that many consumers are neither aware of the existence of this practice nor the limited protection from fraud available to them. Mobile payment companies are urged by the report to do more alert customers to third-party threats and offer them means of redress.

Concerns over data and identity protection are also flagged up in the report, which claims 42% of consumers are reluctant to try mobile payments due to worries about system security. The report recommends payment providers ensure ‘privacy by design’, that is, by ensuring privacy at every stage of the design process, but warns consumers also have a responsibility to protect themselves.

The FTC says the report is aimed at ensuring users are aware of their rights and protections before “widespread consumer adoption” of mobile payments in 2015.

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